The employer has the onus of proving that the employee agreed to be bound by certain notice periods set out in the handbook. If the employer wants to limit the recovery to what is set out in the handbook it must show that the employee was expressly aware of the terms of the handbook that limited his or her recovery on termination and that he or she agreed to them. The court relied on the earlier decision of Rahemtulla v. Vanfed Credit Union where the court stated that:
In the circumstances of this case, the policy manual did not limit the employee's entitlement to reasonable notice at common law. There are, of course, ways of raising the notice provisions in the manual to a binding contract having legal effect. One alternative or method, and probably one that is more appropriate, is to include the clause in a letter of offer or employment agreement that is provided to the employee well in advance of his or her start date so that he or she can get advise with respect to it. There are other arguments that can be raised, but the point here is that, including a provision in a handbook that says that the employee will receive, say, the minimum under employment standards legislation, will not guarantee that outcome when the relationship is terminated.
... if the terms of the policy manual are to be binding, it must be concluded that they have contractual force. The usual elements of a contract must be established: a concluded agreement; consideration; and contractual intention.
The agreement consists in "an outward expression of common intention and of expectation": Anson's Law of Contract (24th ed., 1975) p. 23. Inward concurrence of intention is not enough for the formation of a contract; there must be an outward manifestation of assent by each party such as to induce a reasonable reliance in the other: S.J. Waddams, The Law of Contract (1977), p. 18. Both offer and acceptance must be communicated by one party to the other.
Another good discussion of the effect of Policy Manuals or Employee Handbooks, this time as pertains to "progressive discipline" comes from a former partner of mine, Mr. Justice Randy Echlin in Daley v. Depco International Inc., a case I will be reviewing with my Employment Law class this evening.